Physicians, dentists, and other healthcare professionals decide to work as employees rather than as practice owners for a variety of reasons. Some of these include professional growth opportunities, less administrative work, better base salaries, and steady paychecks. In fact, the American Medical Association (AMA) released a study in 2018 (the most recent data available) that showed employee physicians outnumbered independent physicians for the first time ever, at 47.4% vs. 45.9%.
However, Carol K. Kane, PhD, the director of economic and health policy research at the AMA, cautions that we should not assume these trends will continue. Their data shows that the rate of decrease in physician ownership is still smaller today than it was in the late 1980s and early 1990s, and that more than half of the physicians who left independent work did so between 2012 and 2014. From 2014 to 2018, they report, the trend actually slowed.
With this information in hand, brokers would be prudent to embrace the same cautious mindset about physician trends and instead work to provide benefits counseling to their customers based on the type of practice they currently participate in or run. They should also fully understand the benefits impact for doctors who choose to become employees after owning a practice – especially with regard to disability benefit coverage. Their financial well-being could be at stake.
Why It Matters
Employed healthcare professionals are subject to the benefits package provided by the employing entity, whether it’s a hospital or another private practice. They likely will have no seat at the decision-making table and no say in the level of coverage provided.
Some of these physicians had the ability to choose their own benefits and contracts in the past, so they can use this information to make informed decisions about their place of employment based on not just the salary, but also the benefits package. Other physicians, such as new graduates or those who have never reviewed benefits contracts, are unaware that they may be receiving group benefits from their employers that are inadequate for their financial needs and medical specialties. The fact is that healthcare professionals have specialized income protection needs that employers may not always recognize.
Brokers need to show both healthcare professionals and employers the advantages of offering strong benefit coverages – particularly when it comes to their options for income protection. Employers can offer strong employee benefits to their physicians to prevent turnover at a time when physician shortages are on the rise and are also projected to continue through 2033. A 2016 benefits analysis showed that employees who are happy with their health insurance plans tend to be 96% more satisfied with their jobs, and are less likely to look for new ones in the next 12 months.
A Solid Package is a Win-Win
Barring a non-compete clause that prevents a physician from easily moving on from their place of employment or returning to private practice, the quality of benefits offered could potentially influence whether or not the doctor takes a job, stays in a job, or avoids becoming an employee altogether.
When counseling your clients – especially those clients who provide group employee benefits for physicians – stress the importance of using disability income protection as a way to attract and retain staff. Make sure they understand that disability insurance protects against long-term illnesses or mental health issues, especially for the many physicians who selected their own contracts in the past and therefore ensured their own financial protection.
If trends continue to move in the direction of physicians working as employees, a robust long-term disability (LTD) package that offers “own occupation” coverage based on CPT/CDC-coded procedures, generous MNDA benefits, solid partial disability benefits, and compatibility with existing individual disability insurance (IDI) is the best way to secure top talent as part of a comprehensive benefits package. And if trends revert, where we see more physicians returning to ownership and selecting their own plans, a robust LTD package will ensure the doctors’ financial solvency and help protect their private practice in the event they can no longer work.
Create a robust employee benefits package for your physicians by offering a specialized LTD policy that meets the unique needs of healthcare professionals. Click here to learn more.
